Health Incentives

There are good reasons why fast food restaurants proliferate in the poorest neighborhoods.

One of the complaints people make about the push to get Americans to eat more healthfully is that it costs too much. Now, whether that is true or not is a matter of conjecture, although it doesn’t take an economics major to see that it is often cheaper to buy fat-laden burgers and fries than to purchase healthier options. There are good reasons why fast food restaurants proliferate in the poorest neighborhoods.

Well aware of this perception, many non-commercial foodservice operators have employed a simple method for trying to encourage healthful eating. They offer discounts for the purchase of healthy foods and create attractive combos of low-calorie items to play off the related perception that meal deals are cheaper than à la carte purchases.

I like the incentive approach to wellness. Subsidize my gym membership and I’m more likely to join and take advantage of a fitness facility. Give me opportunities to be educated about nutrition and wellness and I’ll have the ammunition to make healthful choices. Lower the price of healthy foods and I’ll probably buy more of them.

A health insurance firm in South Africa reportedly has taken that last approach, and two researchers have been studying the effort. The insurance company has for the last four years offered a program called HealthyFood. Under the plan, members receive a 25% rebate on healthy items they purchase from 800 supermarkets across the country.

Writing in Modern Healthcare, Roland Sturm, senior economist for the Rand Corp., and Derek Yach, senior vice president of the Vitality Institute, say that the insurer has met with some success by offering its members a reward for buying healthful food items. Sturm and Yach have analyzed data from grocery stores’ checkout scanners to assess the success of the program.

“We estimate that a 25% rebate on healthy foods raises the share of healthier foods that program participants buy by 9%, while cutting the share of less desirable foods they purchase by about 6%,” the pair wrote. “There’s other good news from the South African experiment. Surveys suggest that the price changes altered behavior, too: consumers reported that they were eating larger amounts of fruits, vegetables and whole-grain foods, and said that they were eating less processed meat and foods high in added sugars, fats or salt.”

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